Top Ten COVID-19 Issues Currently Affecting Real Estate
“As seen in the Real Estate Reality Column in the San Leandro Times & Castro Valley Forum, written by Carl Medford”
The Counselors of Real Estate (CRE) just released and outstanding summary of the major issues currently affecting real estate in this new reality.* This is a brief summary.
- COVID-19. Real estate practices as we have experienced them have been turned upside down. Previously accepted norms are being questioned and the future of many (open houses) are questionable. With many sheltering-in-place and moving their workplace to their homes, the types and locations of desirable housing will be changing. Additionally, expect massive changes in the commercial real estate arena.
- Economic Renewal. While the stock and real estate markets are currently ramping upward, the fact that our nation is in a recession will produce a tipping point that may usher us into downward markets for the foreseeable future. The longer pandemic restrictions are in place, the more severe will be the recovery.
- Capital Market Risk. The first thing hit when the pandemic arrived was the stock market. While recent returns have elevated the market back to pre-Covid levels, long-term uncertainty concerning pandemic-induced cultural and business changes will have a profound impact.
- Public & Private Indebtedness. In an effort to hold businesses together, the feds instituted sweeping financial bailouts that have increased our national debt to unprecedented heights. Individual debt is also up as many have been using credit to hold things together during the crisis.
- Affordable Housing. While we all agree that the extreme lack of housing is a primary concern, there is also a strong undercurrent of “not in my back yard” making potential solutions difficult.
- Flow of People: Immigration has been halted and people are fleeing urban centers as the pandemic deepens. This will ultimately result in significant demographic shifts across the country.
- Space Utilization. Health in the workplace is an emerging issue that will shape the face of commercial real estate going forward. Many amenities such as restaurants and theaters may never look the same again.
- Technology & Workflow. Technology that enhances security and “touchless” operation of commonly shared devices will begin to emerge as mandatory.
- Infrastructure. With much of our infrastructure moving from brick-and-mortar to online entities, we will see massive infrastructure changes in the near future.
- ESG. Environmental, Social and Governance criteria has become a critical component in real estate investing. Issues like climate control will be affecting real estate at all levels going forward.
We recommend reading the entire article at https://www.cre.org/external-affairs/2020-21-top-ten-issues-affecting-real-estate/
Carl Medford is a licensed Realtor with Keller Williams Realty and a licensed general contractor. This article is sponsored by the Central County Marketing Association.